Flexible Lease Financing Solutions

VFS offers a wide range of leasing and financing options designed to provide customers cost effective access to equipment when they need it. VFS leasing solutions minimize the financial and technological risks that accompany a straight purchase. Since purchased equipment typically has a longer asset life of 48-to-60 months, or even longer, it carries higher maintenance and IT support costs than current technology. In contrast, an IT lease of 24-to-36 months, or at least two to three years shorter than purchased equipment, carries lower maintenance and IT support costs thereby lowering total cost of ownership (TCO). The VFS team of financial and IT professionals develops long-term partnerships with customers to solve their unique business problems by balancing changes in technology with sound financial management.

A November 2007 IDC report, “IT Capital Investments: Evaluating Technology Life Cycle Management and Lease Versus Own Options,” supports this hypothesis. It concluded that organizations can save at least 20.5% by shortening equipment life cycles, from 48-to-60 months to 24-to-36 months, and by developing a continuous scheduled flow of technology refreshes. Leasing, therefore, is an essential vehicle to facilitate this process.

Summary of Leasing Advantages
VFS lease financing solutions are thoughtful and comprehensive and offer many advantages, including:
    •  Cash conservation and level IT expenditures
       - Reduces spikes in capital budgets
       - Facilitates the spreading out of payments using operating funds
       - Cash is freed up for the most important or strategic operating activities
       - Cash can be used for projects that offer higher returns on investment
    •  Technology refresh flexibility
       - Enables planned shifts to current, more competitive technology
    •  Trade-in credit for older or obsolete IT assets can be applied easily         towards new lease financing
    •  VFS provides high residual values for lower lease payments
       - “Discount effect” of built-in residual value reduces monthly payments
       - Monthly payments are predetermined with high residual values built-in
       - VFS assumes 100% of the risk of obsolescence
    •  Enables off-balance sheet financing at low interest rates
       - Does not increase debt on the balance sheet
       - Competitive interest rates can be much lower than existing cost of          capital
       - Allows for payments to originate from flexible, easier-to-approve          operating budgets
       - Improves financial ratios, such as EVA, ROA, and ROE
    •  Improves management of data center consolidation and IT projects
       - Faster ROI for data center consolidation or IT projects
       - Eliminates large up-front expenditures since lease payments can be          synchronized with actual economic returns on the project
       - Other kinds of assets, such as additional equipment, buildings, and          property, can be integrated in the lease
       - Personalized service with state-of-the-art asset management, tracking,          reporting, and disposal services
       - Leasing alternatives can be tailored for each asset class
    •  Energy savings related to scheduled IT refreshes to current technology
       - Pure dollar savings can be achieved due to improvements in power          efficiencies of current technology
       - Significant energy efficiencies can be realized based on watts/square          footage
    •  Increases operational flexibility
       - IT is viewed as a business tool rather than a long-term asset
       - More flexible and reasonable approach given shortened IT life cycles
       - Easier for IT when there is a need for rapid technology change
       - Easier for lines of business that have a need for rapid technology change
       - A particular benefit during uncertain business climate or reorganization
       - Refreshes, renewals, or extensions can be made easily without penalties
    •  Eliminates equipment disposal risk
       - VFS manages all logistics associated with equipment removal and works          cooperatively with local labor unions
       - Secure “data wiping” and “green disposal” of older equipment is VFS’          responsibility, eliminating customer exposure to local and federal          compliance laws
       - VFS provides a certificate as proof that customer information was          removed securely and safely
       - Costs associated with secure data wipes and disposal can be included in          the lease up-front
       - VFS asset recovery services help to facilitate migrations to new          environments